ADB cuts developing Asia’s growth to 0.1%, lowest rate in six decades
TOKYO, NNA – The Asian Development Bank slashed developing Asian economies’ growth forecast this year to 0.1 percent, the lowest for the region in almost six decades after it was hard hit by the global COVID-19 pandemic.
The ADB revised the figure down from the previous 2.2 percent in April, according to a new set of forecasts released on Thursday. Developing Asia may suffer the weakest growth in 2020 since 1961.
For 2021, growth for the region is expected to jump to 6.2 percent, which will still remain below pre-pandemic levels. The higher growth is mainly attributable to the base-effect of the low figure this year.
Economic growth in Southeast Asia and South Asia is likely to contract by 2.7 percent and 3.0 percent respectively in 2020. East Asia is forecast to grow 1.3 percent, the only sub-region to achieve growth this year, the ADB said in a press release.
The Chinese economy is projected to grow 1.8 percent this year and 7.4 percent next year, compared to the April estimates of 2.3 percent and 7.3 percent.
Excluding the newly industrialized economies of Hong Kong, South Korea, Singapore and Taiwan, developing Asia is forecast to grow 0.4 percent this year and 6.6 percent in 2021, the ADB said.
“Economies in Asia and the Pacific will continue to feel the blow of the COVID-19 pandemic this year even as lockdowns are slowly eased and select economic activities restart in a ‘new normal’ scenario,” ADB Chief Economist Yasuyuki Sawada said in the press statement.
“While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a V-shaped recovery. Governments should undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreaks occur,” he said.
Downside risks persist as the global outbreak of the novel coronavirus “may see multiple waves” this year, while sovereign debt and financial crises cannot be ruled out, the ADB said. It also pointed to “the risk of renewed escalation in trade tensions” between China and the United States.